Superior Court of Massachusetts, Suffolk, Business Litigation Session
Edward Xu PPA Li Chen et al.
Paul Donovan et al No. 137197
MEMORANDUM AND ORDER ALLOWING DEFENDANTS' MOTION
FOR SUMMARY JUDGMENT
Kenneth W. Salinger, Justice of the Superior Court.
dispute relates to a high/low agreement in a prior medical
malpractice case. Plaintiffs had sued two doctors and a nurse
who worked at Tufts Medical Center (" Tufts"). The
parties to that prior action and Tufts agreed prior to the
jury verdict that Plaintiffs would receive a maximum of $2.5
million for each defendant found to be liable and be paid
$300, 000 for each defendant found not to be liable. The jury
found that the two physicians were liable for negligence and
that the nurse was not. It award $24.43 million as damages
against the doctors. In accord with the high/low agreement,
Plaintiffs recovered only $5.3 million.
claim they were fraudulently induced to enter into the
high/low agreement by representations that the available
insurance was capped at $2.5 million per defendant, and that
in reality there was an excess insurance policy that provided
up to $30 million in coverage with no cap per defendant. They
seek damages from the parent of the medical center (Tufts
Medical Center Parent, Inc., or TMCP), the captive insurer
that issued the primary and excess insurance policies (Tufts
Medical Center Indemnity Co., Ltd., or TMCIC), and Paul
Donovan, who is a Senior Claims Administrator for Tufts and
signed the high/low agreement on its behalf.
and TMCIC assert a counterclaim seeking a declaratory
judgment stating that the total insurance coverage available
for the claims in the underlying malpractice case, including
both the primary and excess insurance policies, was capped at
$2.5 million per person per claim or medical incident. TMCP,
TMCIC, and Donovan move for summary judgment on all claims
Court concludes that TMCP, TMCIC, and Donovan are entitled to
summary judgment in their favor. The excess and primary
insurance policies unambiguously provide that the maximum
coverage for the doctors and nurse sued in the prior action
was $2.5 million per individual defendant. TMCP and TMCIC are
entitled to a declaratory judgment to that effect. And
Plaintiffs' claims against all Defendants for fraud and
for committing unfair and deceptive practices in violation of
G.L.c. 93A, and its separate claim against Donovan only for
negligence, all fail as a matter of law.
Parsing the Insurance Policies
Reading Unambiguous Policy Language
[C]onstruing the language of an insurance contract is a
question of law for the trial judge, " and therefore is
appropriate for resolution on a motion for summary judgment.
Thattil v Dominican Sisters of Charity of the
Presentation of the Blessed Virgin, Inc., 415 Mass. 381,
385 n.6, 613 N.E.2d 908 (1993), quoting Cody v.
Connecticut Gen. Life Ins. Co., 387 Mass. 142, 146, 439
N.E.2d 234 (1982). " Like all contracts, if the language
of an insurance policy is unambiguous, " then a court
must " construe the words 'in their usual and
ordinary sense.'" Boazova v. Safety Ins.
Co., 462 Mass. 346, 350, 968 N.E.2d 385 (2012), quoting
Hakim v. Massachusetts Insurers' Insolvency
Fund, 424 Mass. 275, 280, 675 N.E.2d 1161 (1997).
Court is persuaded that there is only one correct way to read
Tufts' primary and excess insurance policies with respect
to per person professional liability coverage limits, and
that the policies are therefore unambiguous with respect to
that issue. See Surabian Realty Co. v. NGM Ins. Co.,
462 Mass. 715, 718, 971 N.E.2d 268 (2012) (court " may
conclude that language [in an insurance policy] is ambiguous
only 'where the phraseology can support a reasonable
difference of opinion as to the meaning of the words employed
and the obligations undertaken'") (quoting Bank
v. Thermo Elemental, Inc., 451 Mass. 638, 648, 888
N.E.2d 897 (2008), and President & Fellows of Harvard
College v. PECO Energy Co., 57 Mass.App.Ct. 888, 896,
787 N.E.2d 595 (2003)).
the relevant policy language is somewhat difficult to parse,
that does not mean that it is ambiguous. Massachusetts
Prop. Ins. Underwriting Ass'n v. Wynn, 60
Mass.App.Ct. 824, 827, 806 N.E.2d 447 (2004) (" While
reading and understanding an insurance policy's
provisions as to coverages, exclusions, and exceptions is
often a formidable task, difficulty in comprehension does not
equate with ambiguity").
the fact that the parties disagree vigorously regarding the
proper way to read the insurance policies does not
demonstrate that there is a legal ambiguity either. See
Boazova, 462 Mass. at 351 (" an ambiguity is
not created simply because a controversy exists between the
parties, each favoring an interpretation contrary to the
other") (quoting Lumbermens Mut. Cas. Co. v. Offices
Unlimited, Inc., 419 Mass. 462, 466, 645 N.E.2d 1165
The Coverage Limits
lawsuit concerns three related insurance policies that
provide professional liability coverage to physicians working
at and employees of Tufts Medical Center. The primary policy
was issued by a captive insurer belonging to Tufts'
predecessor. There is also an excess insurance policy that
was issued by the same captive insurer. Finally, two
reinsurance policies were issued by different syndicates of
underwriters assembled by Lloyd's of London.
primary insurance policy provided each defendant in the
underlying malpractice lawsuit with $2.5 million of coverage.
The primary policy states that each " Insured
Individual" is covered for professional liability up to
$2.5 million for any one " medical incident, " a
term that encompasses all of Plaintiffs' claims in the
malpractice case. The term " Insured
Individual" is defined to include any physician working
at and any other person employed by a named insured. It is
undisputed that the three ...